Not sure how many of you listen to Working Ranch Radio, but the latest episode featured Dr. Mark Johnson from OSU Extension. While Dr. Johnson seems like a nice guy, his justification for buying $7500 bulls (and in some cases well over $10k bulls) over $3500 bulls seemed a bit fishy to me, so I ran some of my own numbers and emailed the host of the show about it. I'm not sure it'll ever see the light of day otherwise so, being the obnoxious smarta$$ that I am, I thought I'd share my email here as I feel I made some valuable points and I'd be curious to get your feedback as well.

Here's a link to the episode: https://workingranch.podbean.com/e/ep-158-what-s-the-value-of-a-good...

Here's my response:

Hi Justin,

I just wanted to clear up some issues with Dr. Mark Johnson's bull math before people head out to buy a bunch of $14,000 bulls. Though I disagree with valuing a bull's lifetime returns based on current record prices, my bigger issue is with with some of his numbers, which are simply incorrect.

Dr. Johnson states that the bulls worth $4000 more adds 32 lbs to 150 calves over his lifetime, and at a lb value of $2.20 and accounting for his added cost, yields a return of $6500.

The problem here is that he's forgotten to account for both price slide and value of gain. While a 900 lb yearling might be worth $2.20, an 800 lb calf is worth about $2.30. So if that 900 lb calf is worth $1980, the 868 lb calf is worth $1937 (868 lbs @ $2.232), for a difference of $43, not $70.40.

Then we have to account for the fact that we don't add lbs for free. Everyone is going to have different numbers here, but I think a cost of $0.75/lb would be reasonable for a lot of producers. Now, 32 lbs at $0.75/lb gives you a cost of $24. Our post-slide price of $43 minus $24 gives us a net of $19 per calf.

If we take $19 by 150 calves we're left with $2850, meaning that our high-end bull has left us not with a profit, but a net loss of $1150. And that's assuming prices stay high and he actually sires 150 calves.

Thanks for your time and I appreciate the show.